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- Central Banks Launch Project Icebreaker To Test Cross-Border CBDCs
- EU Unveils New Sanctions
- CFPB Cracks Down On Regions Bank For 'Illegal Surprise' Overdraft Fees
- Hi Launches First Customisable NFT Card With Mastercard
- Oracle Pays $23m To Settle SEC Bribery Charges
- France Grants Crypto.Com EU Crypto Licence
- DoorDash Partners With Chase To Launch Co-Branded Mastercard Credit Card
- US Ends Trump-Era Fintech Sandbox
- Brazil Tweaks Debit Card Interchange Regulations
- Cathay United Bank Hit By $1.4m AML Penalty In Hong Kong
- Bank Of Lithuania Fines Yet Another Payments Firm
- Revolut Forges Ahead With LatAm Expansion Plans
- Uzbekistan Suspends Mir Card Payments, Blames 'Technical' Issues
- Truss Targets Crypto With New Economic Crime Bill
- No More UK Money Hiding In UAE
- BNPL Makes Inroads In Canada With Square, Amazon Launches
Central Banks Launch Project Icebreaker To Test Cross-Border CBDCs
The central banks of Sweden, Norway and Israel, alongside the Bank for International Settlements (BIS), have launched Project Icebreaker, with the intention of testing how central bank digital currencies (CBDCs) can be used for cross-border retail and remittance payments.
The collaboration will develop a hub for the participating central banks to connect their domestic CBDCs, such as Sweden’s e-krona, with the objective of testing some specific key functions and the technological feasibility of interlinking different domestic CBDC systems.
“By interlinking our current e-krona platform, developed in a test environment, with the other countries we gain valuable lessons regarding cross-border payments using a CBDC,” said Mithra Sundberg, who is heading up the Swedish Riksbank’s CBDC project.
“We also gain a better understanding of important design and policy choices needed to secure cross-border functionalities if we decide to issue an e-krona.”
The architecture is designed to enable immediate retail CBDC payments across borders, at a significantly lower cost than with existing systems, which are typically based on payments being sent via several different banks to the final recipient — the so-called correspondent banking system.
The project will run through the end of the year, with a final report expected in the first quarter of 2023.
EU Unveils New Sanctions
The European Commission has proposed new sanctions targeting Russian trade and more individuals, increasing the listings of persons and entities sanctioned to 1,300.
This list targets key decision-makers, oligarchs, senior military officials and propagandists, responsible for undermining Ukraine's territorial integrity in light of Russia’s much criticised referendums this week in occupied regions.
In addition, the EU is clamping down on the circumvention of the sanctions regime by adding a new category allowing it to list individuals who buy goods in the EU, bringing them to third countries and then to Russia.
Other sanctions targeting trade include an oil price cap. Although the oil price cap had already been agreed by the G7 prior, some EU member states have been unenthusiastic about the idea.
However, commission president Ursula von der Leyen said that this will “isolate and hit Russia's economy even more”.
The latest sanctions drive, according to Von Der Leyen, will keep Russian products out of the European market and deprive Russia of an additional €7bn in revenues. In particular, industries such as chemicals and information technology have been targeted.
Meanwhile, Brussels has proposed a prohibition for EU nationals to sit on governing bodies of Russian state-owned enterprises. This could hit former German chancellor, Gerhard Schröder, for example.
“Russia should not benefit from European knowledge and expertise,” the German commission president said.
CFPB Cracks Down On Regions Bank For 'Illegal Surprise' Overdraft Fees
The Consumer Financial Protection Bureau (CFPB) has ordered Regions Bank to pay $191m after it found that the bank charged customers “surprise” overdraft fees on certain ATM withdrawals and debit card purchases.
According to the regulator, the bank charged overdraft fees even after telling consumers they had sufficient funds at the time of the transactions. Regions leadership was aware of the conduct and could have ended it but they chose to wait while Regions pursued changes that would generate new fee revenue to make up for ending the illegal fees, the agency said.
“Regions Bank raked in tens of millions of dollars in surprise overdraft fees every year, even after its own staff warned that the bank’s practices were illegal,” said CFPB director Rohit Chopra.
“Too often, large financial firms make a calculation that continuing to break the law is more profitable than following it. We have more work to do to change this mentality,” he added.
Regions is ordered to pay $50m into the CFPB’s victims relief fund and to refund $141m to customers harmed by its overdraft policy.
The CFPB has been looking at overdraft fees since at least last December, repeatedly pressuring banks that generate a large portion of their revenue from these fees, and those that had already been found in violation of consumer protection rules, that they can expect “close supervisory attention” from the CFPB.
The exercise, which some senators called “name-and-shame” tactics, made several large banks eliminate or reduce their overdraft fees throughout the year.
Hi Launches First Customisable NFT Card With Mastercard
Hi, a crypto and fiat financial app, has launched a new NFT debit card that allows users to design the card using their own choice of non-fungible token (NFT).
Powered by Mastercard, users will be able to spend fiat or crypto using the card at all of Mastercard’s 90m+ merchants worldwide.
The hi debit card, which is issued by Moorwand, will be available in more than 25 European Economic Area (EEA) countries and the UK.
It has six tiers of membership perks that include 1-10 percent back on all spending, rebates on up to 20 digital subscriptions and the best rates at five-star hotels globally.
The card can be funded instantly with euros or pounds via SEPA Instant in the EU or Faster Payments in the UK using a hi personal IBAN. Participating NFT collections include CryptoPunks, Moonbirds, Goblins, Bored Apes and Azukis.
Oracle Pays $23m To Settle SEC Bribery Charges
Software giant Oracle has agreed to pay more than $23m to resolve charges by the Securities and Exchange Commission (SEC) that it violated provisions of the Foreign Corrupt Practices Act (FCPA).
According to the SEC, Oracle subsidiaries in Turkey, the United Arab Emirates (UAE) and India created and used slush funds to bribe foreign officials in return for business between 2016 and 2019.
“The creation of off-book slush funds inherently gives rise to the risk that those funds will be used improperly, which is exactly what happened here at Oracle’s Turkey, UAE, and India subsidiaries,” said Charles Cain, the SEC’s FCPA unit chief.
This is the second time the SEC has caught Oracle setting millions of dollars aside to bribe foreign officials. In 2012, the company paid $2m to the SEC to settle similar concerns about bribery in India.
France Grants Crypto.Com EU Crypto Licence
Singaporean crypto exchange Crypto.com has been granted a Digital Asset Service Provider (DASP) licence in France by the Autorité des Marchés Financiers (AMF).
“The European market is central to the long-term growth and success of Crypto.com and we are tremendously proud to now receive registration in France from the AMF,” said Kris Marszalek, chief executive of Crypto.com.
“We look forward to continuing to work with the AMF and the ACPR as we introduce our products and services in France, offering users a comprehensive, safe and secure crypto platform.”
Crypto.com, which was founded in 2016, said that it was subject to particular scrutiny around anti-money laundering and combating the financing of terrorism, to receive regulatory approval.
The company has said that its success with the AMF continues its “regulatory licence momentum”. It already holds licences with the Financial Conduct Authority in the UK, as a virtual asset service provider in South Korea and with other EU nations such as Italy, Greece and Cyprus.
DoorDash Partners With Chase To Launch Co-Branded Mastercard Credit Card
DoorDash, an online food delivery platform, has partnered with J.P. Morgan-owned Chase, the US’ largest co-branded card issuer, to launch a new DoorDash Rewards Mastercard.
The card, which will allow users to save and earn rewards both on and off the DoorDash platform, marks an expansion of a pre-existing relationship between all three parties.
Since January 2020, Chase and DoorDash have worked together to offer a range of complimentary DashPass membership benefits to holders of Sapphire, Freedom and Slate credit cards, in addition to most Chase co-branded cards. DashPass unlocks DoorDash discounts in a user’s local area.
The DoorDash Rewards Mastercard is a World Elite Mastercard that includes complimentary 24/7 concierge service and access to Mastercard Priceless Experiences. Mastercard and DoorDash first introduced card benefits together in April 2021.
US Ends Trump-Era Fintech Sandbox
As of Friday, (September 30), the US Consumer Financial Protection Bureau (CFPB) will no longer accept new applications to its regulatory sandbox and no-action letter programme.
The two policies were adopted during the Trump administration with a sunset date of September 30, 2022.
These policies were aimed at promoting innovation by creating a regulatory safe harbour for fintech firms.
Current CFPB director Rohit Chopra has, however, said that these programmes had “proved to be ineffective” and conferred “special regulatory treatment on individual companies”.
The agency will now shift away from this approach and instead focus on analysing general obstacles to open markets, with the policies coming to a close on Friday.
Brazil Tweaks Debit Card Interchange Regulations
The Brazilian Central Bank (BCB) has reduced the cap on interchange fees on prepaid and debit card transactions, the bank announced on Monday (September 26).
From next April, the level of the interchange fee will be capped at 0.5 percent of the transaction value on debit cards and 0.7 percent on prepaid cards.
The amendment simplifies existing regulations, which allow the issuer to charge a 0.8 percent maximum value per transaction as long as the weighted average interchange fee does not exceed 0.5 percent.
The updated regulations will apply to card-not-present transactions, which so far have been exempted from these rules.
With this move, the central bank aims to increase the efficiency of the payments ecosystem and encourage the use of cheaper payment instruments, the BCB said.
Cathay United Bank Hit By $1.4m AML Penalty In Hong Kong
The Hong Kong Monetary Authority (HKMA) has issued a HK$11m ($1.4m) fine to Cathay United Bank following an investigation into the bank’s anti-money laundering (AML) controls.
In a statement, the HKMA said the penalty was applied due to “control deficiencies” in customer due diligence observed between 2012 and 2016.
The HKMA added that, after considering the seriousness of its findings, it wanted to send a “clear deterrent message” to the bank and the industry about the importance of effective AML controls and procedures.
“Senior management oversight is a vital part of an effective risk management framework of banks,” said Carmen Chu, executive director of enforcement and AML at the HKMA.
“Banks should make reference to the HKMA’s relevant guidelines and circulars in adopting appropriate governance systems for money laundering and terrorist financing risk management.”
Bank Of Lithuania Fines Yet Another Payments Firm
Perlas Finance, an electronic money institution (EMI), has been fined by Lithuania’s central bank for failures to comply with anti-money laundering (AML) obligations.
According to the regulator, the company did not ensure internal policies and internal control procedures related to the implementation of international financial sanctions and restrictive measures.
It has now been fined €40,000 and has been given the deadline of October 21 to meet compliance requirements.
By the end of November, it will need to submit to the central bank the conclusion of an external audit confirming that any identified violations have been eliminated and that appropriate measures are now in place.
The Bank of Lithuania has taken an increasingly tough approach to payments and e-money firms that operate in the country following a boom in licences.
On September 9, for example, the regulator announced that it had fined Paysera, another EMI, for failing to apply obligations set by the Bank of Lithuania in 2020. Again, this was related to AML compliance requirements.
The EMI will now need to pay €100,000 by December 31, this year.
Revolut Forges Ahead With LatAm Expansion Plans
Revolut has announced 250 new hires in Mexico and Brazil by 2025 to strengthen its position in Latin America as part of its wider plans to become a global financial super app, El Economista reported.
"In both markets, Mexico and Brazil, Revolut sees a great business opportunity due to the high number of people who have digital accounts which continues to grow exponentially," the firm told the newswire.
The fintech estimates that 40 percent of Brazilians and 15 percent of Mexicans have a digital wallet.
In an earlier interview with local newspaper iupana, Revolut Brazil’s CEO said it chose these countries due to their fintech-friendly regulatory approach.
Although its focus is currently on Brazil and Mexico, over time Revolut plans to expand to the wider region.
Revolut’s first entry to the region took place last summer when it launched a US-Mexico remittance corridor. It is now seeking a banking licence in Mexico to be able to expand its offerings, as well as a direct lending business licence in Brazil, which includes e-money services.
Uzbekistan Suspends Mir Card Payments, Blames 'Technical' Issues
The operator of Uzbekistan’s UZCARD network has suspended the processing of Russian Mir card payments throughout the country. It has also suspended co-badged UZCARD-Mir cards abroad.
In a statement, the Unified Republican Processing Center, which owns the UZCARD brand, said the decision was due to “technical procedures”.
However, there is speculation that Uzbekistan may be distancing itself from the Mir card payment network, after the CEO of the Mir operator, Vladimir Valerievich Komlev, was named on the US Treasury’s latest list of sanctioned individuals.
Kazakhstan’s largest bank, Halyk Bank, has also stopped accepting Mir card payments, according to Russia’s Izvestia news agency.
Truss Targets Crypto With New Economic Crime Bill
The Economic Crime and Corporate Transparency Bill was formally introduced to the UK parliament at the end of last week, with new Prime Minister Liz Truss not dropping the white-collar crime agenda started by her predecessor.
As well as proposing efforts to enhance the UK’s fight against economic crime, and support efforts to tackle terrorist financing, the bill also proposes to make amendments to the Proceeds of Crime Act (POCA) to support the legal enforcement in the UK with the recovery of crypto-assets.
The law will enable law enforcement to more effectively investigate, seize and recover the proceeds of crime within the crypto-asset ecosystem.
No More UK Money Hiding In UAE
Courts in the United Arab Emirates (UAE) can now enforce British legal rulings as a result of a landmark decree by the UAE’s Ministry of Justice, CNBC reported.
The decree enables UAE courts to confiscate money owed in UK non-criminal civil, financial and marital cases, ending the perception that the Gulf country could work as a “safe haven” for people trying to hide their money or avoiding sentences, the news agency pointed out.
Since being placed on the Financial Action Task Force’s greylist in March, the UAE has been taking a number of steps to ensure it gets off the list as soon as possible.
Raising the image of its anti-money laundering efforts is especially important as the country has been positioning itself as a fintech hub in the region, most recently by embarking on a journey to lead innovation in the Metaverse.
BNPL Makes Inroads In Canada With Square, Amazon Launches
Both Square and Amazon have announced their entry into Canada’s buy now, pay later (BNPL) market this week, with launches through a subsidiary and a trial partner respectively.
In Square’s case, the US payments firm has launched its first integration with Afterpay in Canada, allowing sellers to offer BNPL when using Square Online store and Square Online Checkout links.
Square acquired Australia-based Afterpay towards the end of last year for a cost of $29bn, making it the biggest fintech acquisition of 2021.
Meanwhile, Amazon customers can now use BNPL in Canada through Affirm, a payment network that Amazon partnered with in the US last year.
In a press statement, Affirm said its BNPL payment option will be available during checkout at Amazon.ca to all eligible customers in both English and French within the next month.
